Housing, Communities and Local Government: Departmental Spending
(Limited Text - Ministerial Extracts only)
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Kate Hollern
I can actually prove it, Minister. They have been given no information or have been given information too late to implement any changes. As for the app, I am sure we will see it some day.
All of this has been a recipe for disaster, but councils have kept their promises, because they are committed to serving their residents. Yet again, councils will be given no comfort in this estimates debate today. How long must council services—those on the frontline in our hard-hit communities—be treated as Cinderella services? On 16 March, the Secretary of State told councils that the Government stood ready to do whatever was necessary to support them in their response to coronavirus. By 4 May, he was back-pedalling on that pledge, and he gave a grim warning:
“We would not want anyone to labour under a false impression that what they are doing is guaranteed to be funded by central Government.”
Interestingly, the Chancellor said the exact opposite yesterday. He says they agreed wherever it takes. Perhaps we again have an example of a headline not being a true reflection of what is happening in debates.
It is true that the Government have provided councils with funding of £3.7 billion in three tranches to meet the costs of the crisis. The first was mainly for adult social care and was allotted on the basis of relative need. However, the second was allocated on a per capita basis and did not take into account deprivation, despite the mortality rate from the virus in the most deprived areas being more than double that in the least deprived areas. As a result, the funding for metropolitan councils in deprived areas was substantially lower in the second tranche, whereas the allocation for many Conservative-controlled shire councils miraculously increased. Funding for Surrey rose by 32%, whereas that for Liverpool fell by the same percentage—so much for the promise of levelling up.
Blackburn with Darwen Borough Council received a little over £9 million, yet it has been well publicised that, with the anticipated loss of income, the council could face a deficit double the size by the end of the financial year. In March, April and May, councils lost £470 million in business rates and £506 million in council tax as businesses were forced to close and people lost their jobs.
Councils across the country are already making cuts to services and will inevitably be looking at serving section 114 notices. Last week, the Secretary of State announced just £500 million in further funding for councils and a yet-to-be-worked-out sum for loss of income, fees and charges. I say “yet-to-be-worked-out”, because once again, there is no detail.
I recognise that time has marched on. I just ask the Minister to urge the Secretary of State to live up to his promise and, perhaps if that does not work, we can get the right hon. Member for Rayleigh and Wickford (Mr Francois) to get the Prime Minister’s adviser to make a difference.
The Minister of State, Ministry of Housing, Communities and Local Government (Mr Simon Clarke)
I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing today’s debate and I thank hon. Members across the House for their contributions. I entirely echo the tributes that have been paid to the hard work and sacrifice of local government officials and elected representatives around the country. It is a good chance to pay tribute to the frontline workers—the carers, the teachers, the mortuary staff, the social workers, the emergency planners, the refuse collectors and so many others who have done their utmost to make sure that our society continues to function at such a difficult time. Every tier of local government has come together to rise to the enormous challenges that covid-19 has created.
Time is very short, so I will be brief. From the outset of covid-19, the Government have said that we would ensure that councils have the resources that they need. We have already delivered a multibillion-pound infusion of support. Last week, we announced a further comprehensive package of support with several important components. First, we are providing a further £500 million of funding to cover additional local authority spending pressures. That means that since the crisis began, the total unring-fenced grant funding that has been provided to local authorities for their spending pressures now stands at £3.7 billion, and that is without including the £600 million that we provided for care homes to relieve the strain on social care services.
We have particularly asked councils to prioritise some core aspects of their work. The hon. Member for Hackney South and Shoreditch (Meg Hillier), who chairs the Public Accounts Committee, pressed me for detail on this, and those are: adult social care, children’s services, public health services, fire and rescue services, household waste services, shielding the clinically vulnerable, homelessness and rough sleeping, domestic abuse and managing excess mortality. I am very happy to provide any further clarity that would be helpful—
Mr Clarke
As time is extremely tight, I had better make progress.
We have provided in total almost £28 billion to local councils, businesses and communities to help to support them through the virus. That includes £300 million for the new test and trace service. Unlike the hon. Member for Blackburn (Kate Hollern), who spoke for the Opposition, I will not talk that down. I think it is making immense strides. I pay huge tribute to the work of Tom Riordan, the chief executive of Labour-controlled Leeds City Council, who has done a fantastic job in helping us to bring that tool together.
The second element of our comprehensive package is a specific mechanism to address councils’ income losses. That includes a co-payment scheme to cover irrecoverable losses from sales, fees and charges income in financial year 2020-21. That includes such things as car parking fees or revenue from cultural assets. The hon. Lady said that it is not defined, but it is not defined precisely to enable flexing according to the extent of those losses as they crystallise, so it is capable of being as generous as is required to meet the eventual losses that we face.
Through that co-payment scheme, the Government will cover 75% of losses beyond the first 5% of planned income. This will help to address the issues that my hon. Friend the Member for West Dorset (Chris Loder) alluded to. In addition, my right hon. Friend the Secretary of State has committed to extending from one year to three years the period over which councils can manage shortfalls and local tax income relating to this year, as was specifically requested by the LGA.
The Chair of the Housing, Communities and Local Government Committee referenced leisure centres. We are working with the Treasury and the Department for Digital, Culture, Media and Sport on this issue. We recognise its complexities and I can assure him that we are very serious about tackling it. In the autumn spending review, the Government will agree an apportionment of irrecoverable council tax and business rate losses between central and local government for 2020 and 2021.
Taken together, the support offered here will safeguard a range of essential public services, from social care to public health, shielding the vulnerable and now helping to safely reopen our economy and wider society. There will always be scope for specific, bespoke discussions with individual councils that find themselves in difficulty. The shadow Minister referred to Luton Council and its airport. I can assure her that we are very aware of that issue and continue to work closely with them.
On the wider work we are doing, my right hon. Friend the Chancellor gave an excellent statement yesterday underscoring our commitment to saving jobs and boosting growth. Clearly, levelling up is a massive responsibility that the Government are intensely serious about. We heard several colleagues refer to the £3.6 billion towns fund, including the future high streets fund. Be that Barnstaple or Warrington, we want to make sure these funds are paid out quickly and help to make a real difference and deliver for our society. That comes on top of the £5 billion stimulus from the accelerated getting building fund that the Prime Minister announced last week.
We also want to work closely with council leaders from all political parties in delivering our ambitious devolution agenda. This is appropriate, given the hon. Members for Sheffield South East (Mr Betts) and for Sheffield, Hallam (Olivia Blake) and their role in this, as we have the parliamentary order coming up next week to unlock £900 million of investment for the Sheffield city region, which is great. We have also negotiated the £1.1 billion of investment for West Yorkshire announced at Budget. With West Yorkshire’s new Mayor in place, 41% of residents in England and 63% in the north of England will be served by directly elected city region Mayors.
I heard the comments of my hon. Friend the Member for Southend West (Sir David Amess) and my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), and I look forward to meeting them to discuss the situation in Essex, but I can assure them that we will not be pressing ahead with proposals that do not command popular consent. That is always at the forefront of our mind.
On the comments from the SNP Front Bench, I can also confirm that we will publish our White Paper on devolution and local recovery in the autumn, which will address issues concerning the UK shared prosperity fund, which I should point out is our money, top-sliced and sent back to us by the EU. None the less, we will provide detail on that. Clearly, it is very important and he can rest assured we are working hard to work out how we can safely allocate that money, but we made a commitment in our manifesto at the general election that no part of the UK would receive less from the shared prosperity fund than they currently do under EU structural funds.
I am conscious that time is very tight, so I will conclude by pointing out that levelling up is not specific to the north and the midlands of England. I had good talks with my hon. Friend the Member for Isle of Wight (Bob Seely) and we continue to look at his island deal. The whole country—all the nations and regions of the United Kingdom—should look forward to our work on levelling up. We are committed to making it happen and making it happen soon.